IT Firms Expand Operations As Demand For Digital Services Soars

New delivery centers dedicated to delivering digital services increased 177% over the past four years.

digital services

Information technology firms are steadily increasing their volume of delivery centers, as global demand for digital services continues to rise.

According to the latest study from Everest Group, the number of global delivery centers has increased 177% over the past four years.

The share of digital services in outsourcing deals also doubled in the last three years, with cloud, IoT, and big data solutions experiencing higher demand than automation and artificial intelligence services.

Despite the rise, the global services market has not grown much, mainly because the BPO market has dipped, with its share sliding by 4%, from 46% to 42%.

Pointing at Brexit and the protectionist policies of the current US administration, Everest Group says it expects the global services market to continue declining this year as well.

Macroeconomic slowdown, volatility in equity and investment markets, and currency fluctuations will also hamper the growth rate, says Anurag Srivastava, vice president and director of the Global Sourcing practice at Everest Group.

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Asia Pacific, particularly India and the Philippines, accounted for 60% of the global services revenue, followed by nearshore Europe, Latin America and Caribbean (LAC), and Canada.

India and the Philippines seem to have gained the lion’s share of the new delivery centers in the past two years, but US visa regulations will change the outsourcing landscape, fueling growth for the onshore services market, according to the report.

The tightening immigration laws will make it difficult for American firms to exploit foreign resources, forcing offshore providers to expand operations locally.

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